Correlation Between Youl Chon and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Korea Shipbuilding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Youl Chon and Korea Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youl Chon Chemical and Korea Shipbuilding Offshore, you can compare the effects of market volatilities on Youl Chon and Korea Shipbuilding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Youl Chon with a short position of Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Korea Shipbuilding.
Diversification Opportunities for Youl Chon and Korea Shipbuilding
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Youl and Korea is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding and Youl Chon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Youl Chon Chemical are associated (or correlated) with Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of Youl Chon i.e., Youl Chon and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between Youl Chon and Korea Shipbuilding
Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 1.91 times more return on investment than Korea Shipbuilding. However, Youl Chon is 1.91 times more volatile than Korea Shipbuilding Offshore. It trades about 0.56 of its potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about -0.01 per unit of risk. If you would invest 2,045,000 in Youl Chon Chemical on October 28, 2024 and sell it today you would earn a total of 1,215,000 from holding Youl Chon Chemical or generate 59.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| Youl Chon Chemical |
| Korea Shipbuilding |
Youl Chon and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Korea Shipbuilding
The main advantage of trading using opposite Youl Chon and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Korea Shipbuilding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| Youl Chon vs. INSUN Environmental New | Youl Chon vs. Jeju Air Co | Youl Chon vs. Husteel | Youl Chon vs. Fine Besteel Co |
| Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. KB Financial Group | Korea Shipbuilding vs. Shinhan Financial Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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